Consumer Class Action Blog

News, analysis and commentary on state and federal consumer class action litigation

Class (Sort of) Certified in Predatory Lending Action

Posted by Philip Kay on August 22, 2009

In a TILA class action brought by the victims (predatees?) of a complicated mortgage scheme, the Northern District of California denied TILA class certification but only for as long as it takes plaintiffs’ counsel to find a better class representative.

In Plascencia v. Lending 1st Mortg., 2009 WL 2569732 (N.D.Cal., Aug. 21, 2009), the court ruled that the plaintiffs failed to satisfy the typicality requirement of F.R.C.P. 23(a)(3) because their claim was brought after TILA’s one-year limitations period had expired. The plaintiffs knew their claim was barred by limitations but were relying on a class-wide equitable tolling argument.  The court rejected the argument. The court reasoned that to adjudicate the equitable tolling issue would require the type of individualized evidence that is inappropriate in the liability phase of a class action, and it refused to arbitrarily select a specific number of days beyond the normal limitations period to toll the statute for all class members.  The court did certify the plaintiffs’ state-law fraud and UCL classes, but refused class certification on the TILA claim.

The only question remaining is how fast it takes plaintiffs’ counsel to find a class representative whose claim isn’t barred by the one-year TILA limitations period.  The Court practically invited plaintiffs’ counsel to do so and even went so far as to analyze and answer in the affirmative the moot question of whether Plaintiffs’ TILA claim passes muster under F.R.C.P. 23(b)(3)’s predominance requirement.  The court engaged in this analysis “because counsel may move to substitute a new class representative whose TILA claim satisfies the typicality requirement.”   May?

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